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Amazon’s Tactics Confirm Its Critics’ Worst Suspicions

By Farhad Manjoo May 23, 2014 4:29 pmMay 23, 2014 4:29 pm

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Credit The New York Times

Amazon is confirming its critics’ worst fears and it is an ugly spectacle to behold.

For years, authors and publishers have warned that Amazon, Jeff Bezos’ book-selling giant, would one day use its power for ill. Sure, so far, Amazon has marketed itself as a book buyer’s best friend. It sells books at terrifically low prices, it delivers them amazingly quickly, and it constantly invents new technologies to improve the way we read. Amazon has also invested heavily in publishing new authors and it has pushed exciting new formats made possible by electronic distribution.

Yet the literary community has always greeted Amazon’s moves with suspicion. The fear is mostly about the future. What will happen to books when Amazon controls the entire industry? How will authors and publishing houses reckon with Amazon’s unchecked power?

This week, as part of a contract dispute with the publisher Hachette, we’re seeing Amazon behaving at its worst. The company’s willingness to nakedly flex its anticompetitive muscle gives new cause for concern to anyone who cares about books — authors, publishers, but mainly customers.

Here’s the back story: In an effort to exert pressure on Hachette, Amazon began taking down preorder buttons for many Hachette titles. It has also suddenly raised prices on some Hachette books and has changed its page design to more prominently recommend other titles. These moves follow weeks of increasingly hardball tactics. Among other customer-punishing moves, Amazon has increased shipping times for Hachette titles from a few days to weeks.

For years, Amazon’s drive for cheaper prices has been good for consumers, and arguably for literary culture, too. When books are cheaper and more widely accessible, more people can read them — and there’s nothing better for literary culture than people owning and reading books.

Physical bookstores sell books at a huge markup, which necessarily reduces the number of books that people can afford to buy. Amazon sells printed books, e-books and audiobooks for much, much less. Anyone who has used Amazon’s services has noticed how that fact changes one’s attitude toward books. Through its Prime program, through the Kindle, and through its audiobook subsidiary Audible, Amazon has made it possible to buy books on impulse.

Just wait, the company’s critics have always shot back. Wait till Amazon controls the whole market — then see how well it treats authors, publishers and customers.

Now Amazon is walking right into its detractors’ predictions. There are a couple obvious reasons this is a bad strategy. It’s bad public relations — if it doesn’t already, Amazon may soon control a monopolistic stake of the e-book market and its tactics are sure to invite not only scorn from the book industry but also increased regulatory oversight.

But the more basic problem here is that Amazon is violating its own code. To win a corporate battle, Amazon is ruining its customer experience. Mr. Bezos has long pointed to customer satisfaction as his North Star; making sure customers are treated well is the guiding principle for how he runs Amazon.

Now Amazon is raising prices, removing ordering buttons, lengthening shipping times and monkeying with recommendation algorithms. Do these sound like the moves of a man who cares about customers above all else?